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ACC3142 2025 Test 2 Solutions

The document presents a solution report for ACC3142 Assessment 2, detailing standard costs per unit for two products, TrekRoad and TrekEntry, along with their actual income statements and variance analysis. The total revenue from sales is R25,500,000 with a net profit of R6,750,000, while the variance analysis shows a net variance of R2,822,500 favorable. Key variances include favorable material usage and sales volume variances, but adverse labor and overhead variances.

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Rabelani
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13 views3 pages

ACC3142 2025 Test 2 Solutions

The document presents a solution report for ACC3142 Assessment 2, detailing standard costs per unit for two products, TrekRoad and TrekEntry, along with their actual income statements and variance analysis. The total revenue from sales is R25,500,000 with a net profit of R6,750,000, while the variance analysis shows a net variance of R2,822,500 favorable. Key variances include favorable material usage and sales volume variances, but adverse labor and overhead variances.

Uploaded by

Rabelani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ACC3142 Assessment 2 - Solution Report

Solution to Question 1(a)

(a) Standard Cost per Unit (10 marks)

TrekRoad:

- Steel: 25 kg × R65 = R1,625

- Engine: R1,200

- Labour: 5 hrs × R45 = R225

- Variable Overhead: R50

- Fixed Overhead: (5 hrs × R24) + R80 = R200

- Total = R3,275

TrekEntry:

- Steel: 25 kg × R65 = R1,625

- No Engine

- Labour: R225

- Variable Overhead: R50

- Fixed Overhead: R200

- Total = R2,075

Solution to Question 1(b)

(b) Actual Income Statement (10 marks)

Sales:

- TrekRoad: 3,000 units × R5,000 = R15,000,000

- TrekEntry: 3,000 units × R3,500 = R10,500,000

Total Revenue = R25,500,000

Cost of Sales:

- Steel (Issued): 180,000 kg × R65 = R11,700,000

- Engines: 3,500 units = R3,685,000 (FIFO)


ACC3142 Assessment 2 - Solution Report

- Labour: 30,000 hrs × R45 = R1,350,000

- Variable Overheads: 13,000 hrs × R60 = R780,000

- Fixed Overheads: R780,000 + R455,000 = R1,235,000

Total Costs = R18,750,000

Net Profit = R6,750,000

Solution to Question 1(c)

(c) Variance Analysis Report (50 marks)

1. Sales Volume Variance (Gross Profit Basis):

- TrekRoad: (3,000 - 1,250) × R1,725 = R3,018,750 Favourable

- TrekEntry: (3,000 - 3,750) × R925 = R693,750 Adverse

Net = R2,325,000 Favourable

2. Material Variances:

- Price: (R65 - R60) × 220,000 = R1,100,000 Favourable

- Usage: (187,500 - 180,000) × R65 = R487,500 Favourable

3. Labour Variances:

- Rate: (R40 - R45) × 30,000 = R150,000 Adverse

- Efficiency: (37,500 - 30,000) × R40 = R300,000 Favourable

4. Variable Overheads:

- Rate: (R50 - R60) × 13,000 = R130,000 Adverse

- Efficiency: (7,500 - 13,000) × R50 = R275,000 Adverse

5. Fixed Overheads:

- Dept 1: R780,000 - R600,000 = R180,000 Adverse

- Dept 2: R455,000 - R400,000 = R55,000 Adverse


ACC3142 Assessment 2 - Solution Report

Summary of Variances:

- Net Variance: R2,822,500 Favourable

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